Ofcom puts digital dividend on the auction block

Will stage small beauty parade for luvvies

Communications regulator Ofcom has confirmed it will auction off all the spectrum freed up by the switchover to digital services.

Virtually all the spectrum will be auctioned off to the highest bidder - despite broadcasters asking for some to be reserved for high definition TV broadcasts. It is expected that total prices will be just a fraction of what was paid for 3G licenses.

Ofcom said it could find only one area where this market-led approach would likely fail. Therefore some spectrum will be "a beauty contest" for programme-making and special events sector (PMSE). Basically this means wireless microphones - back in January luvvies in London got into a flap over the fate of their wireless mikes.

Things got so ugly that Andrew Lloyd Webber got involved - warning that Ofcom's decision would cause "the end of musicals". This threat has now receded.

The low frequency spectrum is a tempting target because it allows coverage of wide areas with relatively few transmitters, easily penetrates buildings and can carry large amounts of data. Similar auctions are to be held across Europe, but the UK is the first to detail how the sale will happen.

The frequencies could be used for a variety of functions including national digital TV stations, broadband or mobile TV, local TV and cognitive radio - devices which form a mesh network. Ofcom is suggesting cognitive radio could use the interleaved spectrum - essentially the unused frequencies left between TV transmitters to prevent interference. Most of this will go for wireless microphones.

Matthew Howett, an analyst at Ovum, said: "It's broadly as expected, the interesting bit will come next spring when we find out the details of how the auction will work."

Howett said that January would see a big clue as to how much the licenses are likely to go for: "On 4 January 2008 a 700MHz auction will take place in the US. Since this is also in the sub 900 MHz band this could be a test of how much operators are willing to pay." Viviane Reding, European Commissioner for Information Society and Media, has expressed a preference for the spectrum to be used for broadband internet access and to help bridge the digital divide especially in rural areas. Ofcom's announcement is here. ®